The Ray Dalio All Weather ETF Portfolio

What is the Ray Dalio All Weather Portfolio?

The All Weather Portfolio, created by Ray Dalio, is a well-diversified, low-risk portfolio designed to endure any economic environment. The All Weather Portfolio has been around since 1996. The portfolio is crafted to excel in any economic cycle. By employing risk parity to balance asset classes according to economic risk, this portfolio aims to deliver strong performance with lower volatility compared to traditional asset allocation models. In this video, we’ll explore the portfolio to determine if it should be included in our investment strategy.

The All Weather Portfolio is accessible to the general public and is based on the risk-parity principles of the All Weather Fund from Bridgewater Associates, Dalio’s renowned hedge fund.The All Weather Portfolio, is structured to thrive in all economic conditions by incorporating various asset types that perform differently. Diversification has long been recognized as a way to reduce risk and volatility, and the All Weather Portfolio aims to maximize diversification by including a range of asset classes. This benefit arises from the inherent lack of correlation between these assets, eliminating the need for market timing or guesswork. The All Weather Portfolio asset allocation consists of:

• U.S. Stocks
• Long-Term Treasury Bonds
• Intermediate-Term Treasury Bonds
• Commodities
• Gold

Ray Dalio Portfolio Allocation

Ray Dalio’s portfolio allocation leverages the advantages of strategic asset allocation. This approach involves constructing a portfolio with specific target allocations for various asset classes and regularly rebalancing it to maintain those targets. Regarding inflation, gold and commodities serve as real assets, possessing intrinsic value that gains popularity when inflation rises and diminishes the extrinsic value of money. Conversely, when inflation falls, bonds perform well, as the fixed cash payouts provide increase in value.

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